The United Steelworkers, the largest industrial labor union in North America, and Mondragón, the world’s largest federation of worker cooperatives, began this collaboration in October 2009. The Steelworkers have more than 1.2 million active and retired members. On the other hand, Mondragón is a system of more than 260 cooperative enterprises located in Basque country, Spain, employing approximately 85,000 people and generating annual revenue of nearly $20 billion.

One of the key difference between a union co-op and a traditional worker cooperative is the replacement of Mondragón’s Social Council, which represents the interests of the workers as workers and not as owners, with a Union Committee. This Union Committee, representing all non-supervisory worker-owners in the co-op, would be responsible for engaging in all collective bargaining issues with upper level management.

Another important difference in this hybrid model is that the cooperative’s connection to the union provides an opportunity to access the necessary early capital needed to start these businesses that workers often lack. Over time, the worker-owners would slowly purchase their ownership stake in the business, creating a 100 percent employee-owner company.

Although it is still very early in this process, this is an exciting new development and has tremendous potential. Here is a clip from the press release explaining next steps:

Building upon this union co-op model, as well as the OEOC’s work with the Cleveland Foundation through the Evergreen Cooperatives platform (also designed and based on the Mondragon principles), exciting new projects in Pittsburgh and Cincinnati are well underway, with specific announcements anticipated in the next several months. Additional projects based on the union co-op concept have begun or have been proposed in multiple locations from coast-to-coast. Pittsburgh intends to announce its first union-coop project sometime in the late May, early June 2012 timeframe.

As new projects are unveiled, we will be sure to post updates on our blog. For now, check out the press release and the full text regarding the union co-op model.